Medical resident: My budget and planning for the future

My name's Jorge Torres. I'm a medical resident, and my annual salary is $55,000 a year. Los Angeles I think is a great city. It's a very large city, and with very large cities come a lot of wonderful opportunities. There's great restaurants. There's a lot of attractions to do. It's also in California, which has got some of the best weather probably in the country, but along with that opportunity and great weather, it's rather expensive and probably one of the more expensive cities in America. Because it's so large, the price and cost of living can vary quite dramatically from the different parts of Los Angeles. I particularly live on the west side of Los Angeles, which is closer to the UCLA campus. It's closer to the hospitals that I train at, and that's a typically more expensive part of the city, and so I actually do feel in control of my finances. So for me, I sort of already know how much I'm gonna be making throughout residency and then years to come. I also have an average of approximately of what a physician would potentially make. That's a practicing, licensed physician. So based on that, I've been able to look at how many years it would take me to pay off my student loans. During the training period, the federal government has set up a repayment that is really based on how much income you make. So it can vary from 10% to 15% of your annual gross income, and so you pay a little in the beginning, and you usually pay a lot more towards the end. So I make an annual salary of $55,000 a year. My monthly pretax amount is $4500. Of that, $700 goes towards taxes, federal taxes, state, Social Security, and then also, I have about $350 that goes towards a 401(k) that's pretax money that is automatically withdrawn from my paycheck. My take home at the end of that is around $3450, and that's sort of the money that I am able to choose how much I want to spend in sort of what areas. So for me, my current rent is $1100. I live in a two-bedroom, one-bathroom apartment, and I have a roommate who's also a training physician. In terms of utilities, gas, and electric, I spend around $50 a month. In terms of Internet and sort of basic TV, is also around $50 a month. My cell phone bill is around $200 a month, and that's actually a family plan. I have like four other lines that are on there that my siblings and my parents are on, as well, and so together, I just pay the full cell phone bill. In terms of car expenses, I own my own vehicle, and so I pay car insurance and then gas for commuting to and from the hospital. That averages around like $250 a month. In terms of my student loan, based on my income that I make as a resident being 10% of my annual gross income, I pay right around $450 altogether, including all of my loans, and then in terms of my food expense, I spend around $200. It's rather on the minimal side because, as a medical resident, oftentimes a lot of programs, in particularly this one, we get free food that's covered as a medical resident, and so whenever we need to eat, like breakfast, lunch or dinner, oftentimes the cafeteria is provided under some of our compensation. In terms of my other category, I typically, in my budget, I don't list much expenses in other, and the reason that being is the job itself as a medical resident is rather demanding. The hours are rather long, and so typically in a given month, there are times where I don't really do anything other than patient care and, you know, fundamental things at home and seeing some friends and family, and so I typically leave that category empty. I do, however, have a category for restaurants. I spend around $200 a month, and that's something that I really love to do, go out with friends and family and grab something to eat from time to time. Overall, that leaves me with about $950 a month to choose what to spend after all of my expenses. I decide to contribute $450 a month to my Roth IRA. At that rate, that would max out my Roth IRA at the max contribution limit, which is $5500 a year. I chose to put money in a Roth IRA in addition to the 401(k) because it is post-tax money and also Roth IRA contributions, and then after that, that leaves me with around $500 in sort of additional savings. If you start early on and you get used to dedicating a certain amount of money to certain accounts, it's much easier for you to live based on that sort of income. Then you get really used to it, and it's not as hard once you are already making a paycheck to then all of a sudden cut 15% out of your income to go to savings.